Structure to be reviewed

Restructuring involving management and clinical leadership at Dunedin and Invercargill Hospitals will be considered soon, regardless of whether there is to be one Otago-Southland district health board.

The Otago and Southland boards' chief executive, Brian Rousseau, said the move would not be just about saving money, but also ensuring clinical and financial sustainability across the regions.

It was also not about getting rid of clinical or service managers, but looking at the management and leadership of single services through the two city hospitals as well as its outreach services in rural areas, he said.

It was too early to discuss the scope of any possible changes and whether it could include devolving services to the community.

These discussions would take place at the next regional executive management team meeting in a few weeks, he said.

Mr Rousseau was responding to questions following a call from Health Minister Tony Ryall last week for the cash-strapped Otago board, which expects to have a deficit of $10.9 million this year, to sharpen its focus on reducing administrative costs.

Tomorrow, when the Southland board decides whether to vote for a merger, it will also consider a financial report which shows it could end the year with a deficit of $11.1 million, $2.8 million more than forecast.

Mr Rousseau said possible savings from any restructuring had not been quantified, but it would be easier to achieve savings with one board because it could have one provider arm (the part of the board's operation which delivers services).

Legally, each board must have a provider arm and if the merger did not proceed there would still need to be two, which would cost more.

Public Service Association organiser Julie Morton said she was not surprised at the news of possible restructuring, given the size of the deficits.

She said she thought it would most likely involve transferring some services to outside community providers.

So far, only expected governance cost savings of $500,000 under a merger have been spelled out.

Mr Rousseau said he believed each board, in its own right, was "fairly lean", but having one provider arm would give the opportunity to further reduce costs.

In his report to the boards this month, Mr Rousseau makes it clear he believes having two service providers has hindered progress on the boards' strategy to regionalise health services.

An effective structure needed to be in place to support a successful implementation of strategy, he said.

When it voted for the merger with Southland last week, part of the resolution passed by the Otago board included a section resolving that priority attention be given to creating a single provider arm.

The resolution said this would immediately reinforce the need for greater engagement between Otago and Southland senior clinical staff.